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News Item Categories Mergers

“One analysis by Fred Campbell, director of the conservative think tank Tech Knowledge, concluded that withholding Time Warner content from, say, Comcast and other cable companies would cost AT&T $8 billion a year in lost rights fees. To make up that shortfall, AT&T would need to expand its own subscriber base by 13 million viewers, according to the study.”

“‘If this one [transaction] isn’t good, what vertical integration transaction is going to be good? Virtually none,’ said Fred Campbell, director of Tech Knowledge, a free-market think tank and a former head of the FCC’s wireless bureau about a decade ago. ‘Isn’t it a de facto regulation then that we’re just going to prohibit vertical integration?'”

“‘Most antitrust challenges involve mergers between companies that serve the same customers (‘horizontal’ mergers), like Walgreens’ attempt to acquire Rite Aid, because horizontal mergers eliminate a competitive choice from the marketplace,’ Fred Campbell pointed out at Tech Knowledge. The AT&T-Time Warner deal is a ‘vertical’ merger of companies who don’t serve the same set of customers — Time Warner creates programming to sell to distributors and AT&T distributes programming to consumers.”

“‘To successfully challenge this vertical merger, DOJ would need to show that the combined company would have sufficient market power to foreclose rival video distributors from accessing Time Warner content or rival programmers from accessing AT&T’s distribution network,’ Campbell stressed. ‘Precedent, economic theory, and empirical evidence make it unlikely that the DOJ could prove the combined company would have sufficient market power to engage in either foreclosure strategy.'”

“Verizon and Charter may have to divest pay-TV subscribers in metropolitan areas where they overlap to resolve competition concerns, said Fred Campbell, a former wireless bureau chief at the Federal Communications Commission, which would review the deal if it comes together.”

“The deal has little to do with the service, notes former FCC official FredCampbell, now a director at Tech Knowledge, but net neutrality advocates will object. He says: ‘If you’re opposed to the merger and the facts and laws aren’t on your side, you look for a popular hook. With zero rating, you’ve got some built-in noisemaking.'”